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LABOUR SUPPLY UNDER GST

There can be two instances for supply of labour under GST

  1. Supply of both material and labour - The supplier is engaged in supply of labour ( hired labour from outside) alongwith supply of own materials such as cement, steel, sand and other materials, then such service would be classified as a “works contract”.

“Works contract” means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration, commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.

The expression ‘works contract’ is limited to contracts to do with immovable property.

  1. Supply of only hired labour – If the supplier is providing only hired labour from outside and the materials is provided by the supplier, then such contracts will be called as “pure labour  contracts”.

Exemptions in case of “pure labour contract”

  1. Services provided by way of pure labour contracts of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works pertaining to the beneficiary-led individual house construction or enhancement under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana.
  2. Services by way of pure labour contracts of construction, erection, commissioning, or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex.

 The above exemption is not available if the supplier does

        a)    construction work as a whole including labour

        b)    if such construction involve multiple units (more than one dwelling unit).

Reverse charge

  1. In case the outside hired labour are unregistered users, then the supplier of service will have to pay GST on reverse charges on the hired charges paid to the labour.
  2. In case the outside hired labour are procured from registered agencies, then no reverse charge will be applicable. The supplier has to acquire labour from registered agencies on payment of GST.

SAC code and GST rate for Employment services including personnel search, referral service and labour supply service

SAC Code

Nature of service

GST Rate

998511

Executive or retained personnel search services

18%

998512

Permanent placement services, other than executive search

services

18%

998513

Contract staffing services

18%

998514

Temporary staffing services

18%

998515

Long-term staffing (pay rolling) services

18%

998516

Temporary staffing-to-permanent placement services

18%

998517

Co-employment staffing services

18%

998519

Other employment and labour supply services nowhere else

classified

18%

The above services are not mentioned under the list of services that are exempt from GST. The rates for the above services have also not been explicitly mentioned by the GST Council. Hence, the default GST rate for services of 18% would be applicable for the above services.

Disclaimer - The information provided in this document is for general information only. It is based on the information available publicly. The user of this document should be aware that the interpretation or implications of relevant GST rules may change/vary depending upon circumstances.

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am goverment contructor under P.H.ENGG.DTE,paying salary to workers for on&off the valve for rural water suppy scheme of govt.
My question can i claim gst 12% from goverment for labour payment.

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i am electrical contractor working of 11 kv erection work what is GST ROLE

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sir we supplied manpower for mucipality for Sanitation,water supply,Street light and drivers.

above catogiries comes under exmption or not

if no exmption what percent will apply

thank you

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Dear sir,

What is GST charge for labour monthly salary payment , the labour are providing through out source provide , when payment of salary including GST OR excluding GST. Everyone labour salary near about Rs 10000/ month. What salary amount under GST payment.
Please guide us.

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sir , I am civil controctor I do consturcation manpawer and with material what is gst rate and other state igst bill issue raies karya ya gst registertion manotery h

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I'm civil contractor with registered partner ship firm. We will construct single unit house for the land owner on the works contract basis with supplying material and labour ,by changing slab area rate from the owner what the gst rate is applicable to our firm.

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Can we arrange labour on contract basis for our manufacturing unit

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In respect of Works Contract, the Contractor has to pay the GST for the value of work which involves labour and Civil/Mechanical works.

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I am contract basis staff working for central PWD is GST is applicable for me....why the contractor 12 percent GST deducting from my ...is it reliable...apart from this they are deducting 2 percent I.T and L C 1 percent

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Sir, what is the gst rate for man power supply sir.

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